from staff
MPS Group, Inc. a leading provider of specialty staffing, consulting and business solutions, announced this week financial results for the third quarter and nine months ended Sept. 30. Third quarter revenue of $408 million was within the range of guidance previously provided by management, and diluted net income per common share of $0.06 was above the range of guidance previously provided by management, due primarily to lower general and administrative expenses and the benefit of a lower income tax rate.
MPS Group revenue decreased 29 percent versus last year’s third quarter. Excluding the impact of changes in foreign currency exchange rates, revenue was down 25 percent versus the third quarter of 2008. On a sequential basis, revenue declined 2 percent versus the second quarter of 2009. Excluding the impact of changes in foreign currency exchange rates, revenue decreased 5 percent sequentially versus the second quarter of 2009.
Third quarter gross margin of 26.8 percent was adversely affected by fewer permanent placement fees, which represented 2.9 percent of total revenue in the third quarter of 2009 versus 5.3 percent of total revenue in the prior year’s third quarter. In the third quarter, operating income was $8 million, or 2.1 percent of third quarter revenue, compared with $7 million, or 1.6 percent of revenue, in the second quarter of 2009.
“We were pleased with our financial performance for the quarter despite the current weakness in the employment market,” said MPS Group CEO Timothy Payne.
“During the quarter, general and administrative expenses declined $6 million sequentially versus the second quarter of 2009, which produced a higher level of taxable income resulting in a lower than expected effective income tax rate,” said MPS Group Chief Financial Officer Robert Crouch. “The combination of these two items resulted in earnings per share being above the range of guidance previously provided.”
As previously announced, MPS Group has signed a definitive agreement to be acquired by Adecco Group for $13.80 per common share in a cash transaction valued at approximately $1.3 billion. The Adecco Group, based in Zurich, Switzerland, is a Fortune Global 500 Company and the world’s leading provider of human resource solutions with operations in over 60 countries. The transaction is expected to close in the first quarter of 2010 and is subject to MPS Group shareholder approval, antitrust clearance and certain other regulatory approvals and closing conditions.